TMI Blog2017 (5) TMI 1354X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO is only on the basis of surmises and conjecture without bringing any cogent material on record to substantiate that the assessee was engaged in the business of gold and jewellery and the AO had not brought any material on record to substantiate that the denial of the assessee was false. As during the course of search no unaccounted stock or assets were found. It is also noticed that in the assessee’s case search took place on 09.12.2005 and the seized material was with the AO who issued notice u/s 153A of the Act on 05.09.2007 but he did not make any enquiry during that period i.e. between 09.12.2005 and 05.09.2007, to ascertain as to whom the payments, if any, were made and how the assessee was related to those payments. On the contrary, the assessee denied the ownership of the document from the very beginning. We, therefore, considering the totality of the facts and by keeping in view the ratio laid down by the Hon’ble Jurisdictional High Court in the aforesaid referred to decision of Pr. CIT Vs M/s Delco India Pvt. Ltd. (2015 (7) TMI 47 - ITAT DELHI) are of the view that the addition made by the AO and sustained by the ld. CIT(A) was not justified. Accordingly, the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e u/s 153A of the Act was issued on 05.09.2007 requiring the assessee to file the return of income. In response the assessee filed the return of income on 12.10.2007 declaring an income of ₹ 1,15,652/- in which the business income was declared at ₹ 87,916/- and the income from other source at ₹ 27,889/-. The AO on the basis of the seized documents asked the assessee to explain the unrecorded sales/business transactions and unrecorded payment in respect of business of purchase and sale of gold jewellery and to produce the books of account. The assessee vide letter dated 17.12.2007disowned the loose papers found from his residence and submitted that he had not made any noting on those papers and that some persons had noted them but somehow forget and left there and the assessee did not taken notice of it nor could he contacted the person concerned to hand it over loose papers belonging to him. It was further submitted that such papers continued to remain in the house of the assessee on the belief that the person concerned may turn up and may require the same to be handed over to him. Therefore, the assessee could not make out head or tail in respect of the notings m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ish any explanation in respect of these papers the addition is required to be made in the hands of the assessee. It is submitted that the Assessing Officer failed to appreciate that since the assessee did not know about any of the documents he had not furnished any explanation. It is submitted that furnishing of any explanation in respect of unrelated material would prove the stand of the assessee contradictory in as much as on one hand he was denying the ownership of the documents on the other hand the same is explained. In other words as, per the principle of human probabilities, how a person would explain the documents not related to him. It is submitted that mere possession of documents perse does not warrant any addition. There are umpteen number of judgments where in it has been held that the presumption available in section 132(4A) is a rebuttable presumption and the AO cannot make any addition simply on the basis of this presumption. A reference can be made to the recent decision of the Supreme Court in the case of P. R. Metrani reported in 287 ITR 209(SC). 1.3 It is next submitted that nothing is found in search which shows that these payments were actually made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue has used its longest arm of search available to the Revenue to unearth unaccounted money or evidence thereof. Having taken above step and as per law, it has to be proved strictly that undisclosed income assessed in the hands of the assessee is undisclosed income beyond a reasonable doubt. As noted earlier in the first page, total of all the five figures is 57.50 but addition of ₹ 48 lakhs was made and not of ₹ 57.50 lakhs. Why figures mentioned at second place after some gap was not taken into consideration. How 48 have been made as ₹ 48 lakhs and that too undisclosed income of the assessee is absolutely not clear from the assessment order. It was stated that ₹ 9.50 lakhs is recorded to be received through cheque and therefore above amount was not added. It is correct that before 9.50 the word. Ch is written but there was nothing on record to show this amount was any way different from other figures/amounts. No attempt whatsoever was made to link any of the entry in the seized book with any transaction earned by the assessee in his capacity as director or by his wife or M/s. I.G. Builders and Promoters Ltd. to show the amount in figure as assessable u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 134A would be available while framing the regular assessment or for that matter under any other proceeding under the Act except under Section 278D. Section 132 being a complete code in itself cannot intrude into any other provision of the Act. Similarly, other provisions of the Act cannot interfere with the scheme or the working of Section 132 or its provisions. Presumption under Section 132 (4A) is available only in regard to the proceedings for search and seizure and for the purpose of retaining the assets under Section 132(5) and their application under Section 132B. It is not available for any other proceeding, except where it is provided that the presumption under Section 132 (4A) would be available. In our considered view, the High Court of Allahabad in Pushkar Narain Sarraf (supra) and the High Court of Delhi in Daya Chand (supra) have taken the correct view in holding that the presumption under Section 132(4A) is available only in regard to the proceedings for search and seizure under Section 132. Such presumption shall not be available for framing the regular assessment. The High Court of Karnataka in the impugned judgment has clearly erred in ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a piece of evidence in any other proceedings under the Act, all contentions are left open. The appellant had denied the ownership of the seized paper Annexure-A Page 31, 32 and 33 etc from the very beginning and stated that these paper were not related to the assessee. No statement was recorded by the search party regarding the ownership of these papers and the content thereof at the time of search No enquiry was made either by the authorized officer or the AO from the parties whose names are appearing in the said documents- The AO had made the addition only on the presumption u/s 132(4A) that the documents found from the residence of the appellant must be presumed to be his documents. However, as per the judgment of the Hon'ble Supreme Court supra the presumption u/s 132(4A) would be available only for the purpose of retaining the assets u/s 132(5) and their application u/s 132B. Such presumption shall not be available for framing the regular assessment. In this view of the Hon'ble Supreme Court the papers / documents found at the residence of the appellant which have been denied from the very beginning and no other corroborative evidence have been found to connect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rative evidence during the course of search and assessment proceedings. However, from the said seized documents the figure of ₹ 12982873/- is clear. It was for the assessee to explain the noting in those seized documents but the assessee has only denied the ownership of those documents and no explanation have been filed about the notings. As per the provision of section 292C cited above these document has to be presumed to belong to the appellant as these were recovered from his control at the time of search and content of such documents are to be presumed to be true. In view of the above discussion in my considered opinion the AO has correctly treated this amount as unexplained expenditure in the assessment of the appellant during the year. Thus the appeal of the appellant on this ground is dismissed, and addition of ₹ 1,29,82,873/- is confirmed. 6. Now the assessee is in appeal. The ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the ld. CIT(A) grossly erred in confirming the addition as the assessee from the very beginning denied that loose papers belonged to him and that the presumption u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdwaj Vs DCIT 21 Taxworld 358 (ITAT Jaipur) * Mohd. Lllias Choudhary Vs DCIT 25 Taxworld 394 (ITAT Jaipur) * Moonga Metals Pvt. Ltd. Vs ACIT 67 TTJ 247 (All.) 7. In his rival submissions the ld. DR supported the orders of the authorities below and further submitted that during the course of assessment proceedings, the assessee was asked to furnish the explanation relating to page nos. 31, 32 33 of Annexure A in respect of payments of ₹ 1,29,82,873/- made to various parties as on 26.12.2004 and to explain the source of payment by furnishing the necessary evidence as to whether these payments had been recorded in the books of accounts but the assessee could not furnish any information in this regard. Therefore, the addition made by the AO and sustained by the ld. CIT(A) was fully justified. It was further submitted that the documents were found from the possession of the assessee, names, figures of amount were mentioned in those documents and there was a link between the assessee and documents. Therefore, the onus was on the assessee which was not discharged as such the provision of Section 292C of the Act were applicable and it was to be presumed that the do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ownloads are relied upon. The fact that these were unimpeachable third party evidences that too from the official government sites goes without saying. In these facts, merely sending notices to the addresses provided on the ROC site cannot be said to be rebutting the evidence on record namely that M/s Smridhi Sponge, assessed to tax in a specific jurisdiction in Kolkata manufacturing M.S. Ingot and Sponge Iron, having specific address as per ROC site receiving payments in cash and cheque as per the seized documents qua which presumption u/s 292C operates towards their correctness; wherein two specific cheques were honoured by Punjab National Bank at Jamshedpur whose account number was 1021 ;, branch code and factum of the payments made on behalf of the M/s Galaxy Exports as the same Galaxy found mentioned at Paper Book page 47 (Seized documents) also dealing in Iron Ore were provided; where the names and addresses of the Directors of both the companies; their authorized share capital; details of their balance sheets as per ROC site; Auditor's, Reporters etc. are all given. The fact that these were relevant unimpeachable evidence has not been doubted. In these facts the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessary information for the AO to make the requisite enquiries from M/s Smridhi Sponge Limited as well as M/s Galaxy Exports Pvt. Ltd. In our view, no interference with the order of the ITAT is called for under Section 260A of the Act since the findings of the ITAT are essentially factual. Further, we find no infirmity with the findings returned by the ITAT and in any event the same cannot be held to be perverse by any stretch. 18. In the circumstances, no substantial question of law arises and the appeals are, accordingly, dismissed. 11. Similarly, the ITAT Mumbai Bench in the case of Sh. Pandoo P. Naig Vs ACIT and ACIT, CC-32, Mumbai Vs Prakash B. Bandarkar, Parvin B. Bandarkar, Room in ITA Nos. 7089 7364/Mum/2011 and ITA No. 6671 6672/Mum/2012 (supra) vide order dated 24.06.2016 held as under: 14. We find that the wording of the section 292C which supposes the presumption to be taken is qualified with the words 'may be', hence, it may or may not be presumed that such documents belong to the person searched. Firstly, the section uses the word 'may presume' and not 'shall presume', hence the presumption of facts under section 292C is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of ITR placed at page no. 1 of the assessee s paper book. In the present case, it is not brought on record that the assessee was engaged in the business of gold or jewellery and earning the income from said business, the addition has been made by the AO by presuming that the assessee had made payments to the certain parties but in those documents which had been relied by the AO nowhere it is mentioned that the assessee purchased the gold and even the nature of the transaction is not clear because against certain payments, some quantity of gold has been written and against the others nothing is mentioned. Therefore, the addition made by the AO is only on the basis of surmises and conjecture without bringing any cogent material on record to substantiate that the assessee was engaged in the business of gold and jewellery and the AO had not brought any material on record to substantiate that the denial of the assessee was false. 13. In the present case, the contention of the assessee that there was a family function two months prior to the search and somebody has forgotten the documents found during the course of search has not been rebutted. It is also noticed that the ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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